Fox group holdings pty ltd

Trucking Around: A Little Look At Linfox Logistics

By Shani Hartley, Innovative Learning Team, Oakhill College

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Linfox likes to peddle its humble beginnings of ‘one man and a truck’ back in 1956. The media laps up this story as evident by BRW publishing a glowing article about Linfox’s ‘blue-collar family values’ (Lindhe 2012). Although once a public company, in 1989 Linfox returned to being a private company after being listed on the Australian Stock Exchange for just two years. The company is currently called Fox Group Holdings Pty Ltd but still operates under the name of Linfox. Linfox is a large company with estimated annual revenue of $3 billion and 25,000 employees but continues to function as a family business. Due to its size it virtually operates as a public company, including ‘a board of non-executive directors offering independent advice’ (Lindhe 2012). However, despite Lindsay Fox now taking a backseat role, it appears that his legendary style of management still influences the company enormously. He promotes the importance of good relationships with suppliers, customers and employees and is well-known for being on good terms with people in government. Although chiefly known as a trucking company, as per its foundation, it is actually more about the logistics of supply chain management, where transport is just one component of the company’s activities. Linfox is responsible for many of Australia’s resources to move from the ground to manufacturers, and for final consumable goods to reach the shelves of retailers.

Marketing At Amazon

Trucking magnate Lindsay Fox sums up the key to becoming rich: ‘Do what you do well - and I do trucks.’ (Skeffington 2004)

A supply chain is the journey of a product or raw material from its source to the consumer or end-user. Products can be everyday household items like tissues, whitegoods, hair products or toothpaste, consumables like food, or resources like fuel. Every item on the market comes to the consumer via a supply chain. http://www.linfox.com/Services-and-Solutions/What-is-a-Supply- Chain.aspx

Figure 1: Global Source: Linfox

In the last twenty years, Linfox has made several major acquisitions for rapid expansion, including: • Avalon Airport in 1997, where the discounter airline, Jetstar, currently has its Melbourne destination • Armaguard in 2003, a cash transportation company (an example of horizontal integration), and • FCL Interstate Transport Services in 2006, a rail freight forwarding company - freight forwarding is the organisation of distribution channels without doing the actual transporting of the products. Linfox also owns the Phillip Island Grand Prix Track, where the Australian Motorcycle Grand Prix is held, and the Australian Automotive Research Centre, where all types of vehicles can be tested, including their own trucks. More recently, Linfox has sold a significant amount of property to repay debt and further invest into Thai and Australian logistics operations, particularly the Western Australian mining industry (Danckert 2013).

STUDENT ACTIVITIES 1. What is the difference between a public and private company? Why would Linfox return to being a private company?

2. Where does the company name Linfox come from?

3. Describe Lindsay Fox's style of management.

4. What characteristics would Linfox have for the author to describe it as functioning as a family business?

Vocabulary/concepts Define each of the following terms in their correct business context: public company, private company, logistics, supply chain management.

STUDENT ACTIVITIES 5. What have been the main contributors to Linfox's global expansion?

6. How would understanding the relevant issues in each country enable a business like Linfox to expand globally?

7. Construct a diagram showing Linfox's vertical and horizontal integration.

8. Explain the benefits of the sale of property to Linfox.

Vocabulary/concepts Define each of the following terms in their correct business context: acquisitions, vertical integration, global expansion.

http://www.linfox.com/Services-and-Solutions/What-is-a-Supply-Chain.aspx
http://www.linfox.com/Services-and-Solutions/What-is-a-Supply-Chain.aspx
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Operations The constant acquisitions of other companies result in economies of scale by having many of the various stages of the supply chain process under the one umbrella and enabled the move from being a transport company to being a complete supply chain logistics company, responsible for many of the decisions involved in the movement of consumer goods and various resources. Linfox has been involved with organising the transportation of some unusual items such as giraffes, elephants and the Olympic Cauldron to Homebush Stadium. In fact, ‘Linfox became the logistics provider for the 2000 Sydney Olympic Games; the biggest peace-time logistics operation in Australia’ (Wiggins 2013).

Linfox has a strong philosophy of continuous improvement in order to discover new efficiencies and technology has helped this process. Adapted or tailor made software and GPS equipment are used to track the movement of freight and measure the meeting of targets. Programs such as ‘LeanFox’ train employees ‘to recognise waste within processes and increase efficiency in their operations’ (Linfox March 2013). Another area of competitive advantage is obtained by locating property close to transportation routes and of course it reduces fuel costs when the transport method shifts from road to rail.

In the distribution centres, technology is being employed to improve the processes of moving the pallets of goods. For example, scanners automatically record the details of the pallets and robotic equipment moves them about as needed. A case study of Linfox and Kellogg’s use of technology in supply chain management can be found at https://www.dexion.com.au/media/ casestudy/18.pdf. Other companies that outsource at least some parts of their supply chain management to Linfox include Blue Scope Steel, Campbell Arnott’s, Unilever, Carlton United Brewery, Coles, Woolworths, Bunnings and just recently Linfox was contracted to manage warehousing and distribution for the Australian Defence Force. Environmental considerations are also purportedly important to Linfox, claiming that they are ‘well on track to meet its target of cutting greenhouse gas emissions target by 50 per cent by 2015 (it is down 36 percent to date)’ (Wiggins 2013). Other advantages of moving into rail logistics is that it reduces the fumes produced by trucks and the road congestion caused by population growth. Linfox also state they are becoming smarter with their ‘use of electricity and warehouse design standards’ (Linfox Sept 2013).

Figure 2: Employee Source: Linfox

‘Linfox’s greatest asset, without a doubt, is its people. Individuals who have virtually given a lifetime to lay the foundations to go forward. Linfox people are the best there are in the industry.’ – Lindsay Fox http://www.linfox.com/About-Linfox/Company-Overview/History.aspx

Human Resources

Providing great YouTube footage, two recent accidents in Sydney involving trucks have provided bad press for the trucking industry and its drivers. 1. Last November a tip truck scraped the roof of a tunnel, dropping debris everywhere and caused major traffic delays: http://youtu.be/Je2czY1zNn4 2. In October a petrol tanker was involved in a multi- vehicle accident resulting in a fire that caused two deaths: http://youtu.be/LBNsF7Ntjyg There have also been police raids on transport companies over the last couple of years due to concerns with safety breaches, such as tampering with speed inhibitors to allow the trucks to drive above the speed limit. In light of all this, Linfox has fared well with its promoted emphasis on safety. According to Linfox (March 2013), safety is at the forefront of all they do and is always the first item on the agenda of meetings. The ‘Vision Zero’ program aims for: • ZERO fatalities • ZERO injuries • ZERO motor vehicle incidents • ZERO net environmental emissions and • ZERO tolerance of unsafe behaviours A considerable investment in technology enables indicators of safety to be closely monitored:

The training and development of employees also seem to be important at Linfox. For instance, online learning is provided through its own Linfox College and driver training through its own driver training centre. Health is currently a major focus, arguing, ‘By looking after employees better, the company will attract talented people’ (Wiggins 2013).

Staff at the Linfox operations centre can detect if a truck in their fleet has braked suddenly, swerved harshly or tipped over, and can immediately contact the driver to see if they are OK. If the temperature of a cold truck rises or falls, or if the refrig- eration unit’s oil level is insufficient, sensors detect and relay the problem before the chilled goods in the truck are damaged. Truckies are reminded to take their ‘fatigue’ breaks using the company’s proprietary communications system, log in and out of their trucks, and can use the system to email their families, or Skype with their kids during rest breaks. (Walters 2013)

STUDENT ACTIVITIES 9. Describe how the acquisition of other companies benefits Linfox.

10. Why would sponsorship of the Sydney Olympics provide Linfox with a marketing advantage?

11. How does reducing waste increase competitive advantage?

12. Investigate the case study of Linfox and Kellogg's use of technology using the link provided in the article.

13. What strategies does Linfox use to support the natural environment?

Vocabulary/concepts Define each of the following terms in their correct business context: economies of scale, continuous improvement, environmental considerations.

https://www.dexion.com.au/media/casestudy/18.pdf
https://www.dexion.com.au/media/casestudy/18.pdf
http://www.linfox.com/About-Linfox/Company-Overview/History.aspx
http://youtu.be/Je2czY1zNn4
http://youtu.be/LBNsF7Ntjyg
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Marketing Linfox has had some clever marketing strategies, not always designed as such. When Lindsay Fox bought his second truck the well-known slogan ‘You are passing another FOX’ was born and became synonymous with Linfox trucks. The yellow logo on a red background is well known in Australia but mainly remains with the supply chain arm. Armaguard and the airports retain their own branding.

Linfox promotes itself as providing solutions and that it is constantly seeking to streamline tailor made processes for the client. Lindsay Fox has a plaque in his office that reads: ‘Look after your customers. If you don’t, someone else will’ (Lindhe 2012). It appears Linfox strongly adheres to relationship marketing ideals with customer service driving the company’s strategies, so that when businesses enter into a relationship with Linfox the currents run deep.

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Linfox is also heavily involved with public relations as part of its Corporate Social Responsibility activities and sponsor Nippers and Boots for Kids, an indigenous program to provide football boots to young players, amongst other organisations. Linfox has also helped in times of natural disasters, such as bushfires, by providing warehouse facilities and transporting donated goods and emergency supplies to victims.

Success This article almost reads like promotional material but it is difficult to find bad press for Linfox. There have been a few court cases for unfair dismissal where Linfox was ordered to reinstate the employees. One employee had sworn at his manager and another wrote racially and sexually derogatory comments on a Facebook page he didn’t realise was publicly accessible. Now there is a tight social media policy in place, Linfox has more recently had success in dismissing employees on that basis. There is currently a dispute between Linfox and the National Union of Workers over employment contracts but it has not received much media coverage since October 2013.

Figure 3: Country road Source: Linfox

‘The key to our success would be the strength of our relationship with our customers for the duration. The foundations that were laid with these companies has been really the strength of our organisation.’ – Lindsay Fox http://www.linfox.com/About-Linfox/Company-Overview/History.aspx

As a privately owned family business, Linfox does not have to reveal information to the same extent as public companies, particularly regarding finances, but by all accounts it appears Linfox is a largely successful company, second only to Toll Holdings Limited in the logistics business in Australia. Whether it is genuinely true or clever public relations, Linfox has an amazing reputation. Watch the promotional video, ‘Working Smarter’, cleverly filled with people from a diverse range of cultural backgrounds, to see how good they say they are: http://www.linfox.com/News-and-Media/Media-Pack.aspx

References Danckert, S. 2013, ‘Linfox on hunt with $300m war chest in tow’, The Australian, July 18, accessed 8 February 2014 http://www.theaustralian.com.au/business/property/linfox-on- hunt-with-300m-war-chest-in-tow/story-fn9656lz-1226680958895 Lindhe, J. 2012, ‘Billionaire truckie passes on blue-collar family values’, BRW, November 29, accessed 1 February 2014 http://www.brw.com.au/p/business/billionaire_truckie_passes_ on_blue_lopyvmnyLi2aIhjInn9FrI Linfox website: http://www.linfox.com/ accessed 9 February 2014 • About Linfox – Corporate Social Responsibility. http://www.linfox.com/About- Linfox/Corporate-Social-Responsibility.aspx • About Linfox - History. http://www.linfox.com/About-Linfox/Company- Overview/History.aspx • About Linfox – Linfox Locations. http://www.linfox.com/About-Linfox/Linfox- Locations.aspx • About Linfox – Values. http://www.linfox.com/About-Linfox/Company- Overview/Values.aspx • Linfox Media Pack. http://www.linfox.com/News%20and%20Media/Media%20 Pack.aspx • Solutions. Editions: June 2006, March 2013 and September 2013. http://www. linfox.com/News-and-Media/Solutions-Magazine.aspx Skeffington, R. 2004, ‘How to make $720 million’, The Sun-Herald, May 23, accessed 8 February 2014 http://www.smh.com.au/articles/2004/05/22/1085176041376.html Walters, K. 2013, ‘Linfox's John Ansley: CIOs aren’t ‘head geeks’ anymore’, LeadingCompany, February 1, accessed 9 February 2014 http://leadingcompany. smartcompany.com.au/chief-information-officer/linfoxs-john-ansley-a-thoroughly-modern-cio Wiggins, J. 2013, ‘Cleaner air, healthier truckers top Linfox list’, Financial Review, November 6, accessed 1 February 2014 http://www.afr.com/p/australia2-0/cleaner_air_healthier_ truckers_top_RnFaIifTZ9RvXI6Y9sVygJ

STUDENT ACTIVITIES 14. Why does Linfox promote its safety record?

15. What recommendations would you make to Linfox to use safety as a marketing tool?

16. Explain why health is a major focus.

17. Analyse reasons why each acquisition retains its own brand

18. Linfox undertakes corporate social responsibility activities. Give examples of what other large businesses do in your local area to display their social conscience.

Vocabulary/concepts Define each of the following terms in their correct business context: corporate social responsibility.

http://www.linfox.com/About-Linfox/Company-Overview/History.aspx
http://www.linfox.com/News-and-Media/Media-Pack.aspx
http://www.theaustralian.com.au/business/property/linfox-on-hunt-with-300m-war-chest-in-tow/story-fn9656lz-1226680958895
http://www.theaustralian.com.au/business/property/linfox-on-hunt-with-300m-war-chest-in-tow/story-fn9656lz-1226680958895
http://www.brw.com.au/p/business/billionaire_truckie_passes_ on_blue_lopyvmnyLi2aIhjInn9FrI
http://www.brw.com.au/p/business/billionaire_truckie_passes_ on_blue_lopyvmnyLi2aIhjInn9FrI
http://www.linfox.com
http://www.linfox.com/About- Linfox/Corporate-Social-Responsibility.aspx
http://www.linfox.com/About- Linfox/Corporate-Social-Responsibility.aspx
http://www.linfox.com/About-Linfox/Company- Overview/History.aspx
http://www.linfox.com/About-Linfox/Company- Overview/History.aspx
http://www.linfox.com/About-Linfox/Linfox- Locations.aspx
http://www.linfox.com/About-Linfox/Linfox- Locations.aspx
http://www.linfox.com/About-Linfox/Company- Overview/Values.aspx
http://www.linfox.com/About-Linfox/Company- Overview/Values.aspx
http://www.linfox.com/News%20and%20Media/Media%20 Pack.aspx
http://www.linfox.com/News%20and%20Media/Media%20 Pack.aspx
http://www. linfox.com/News-and-Media/Solutions-Magazine.aspx
http://www. linfox.com/News-and-Media/Solutions-Magazine.aspx
http://www.smh.com.au/articles/2004/05/22/1085176041376.html
http://leadingcompany. smartcompany.com.au/chief-information-officer/linfoxs-john-ansley-a-thoroughly-modern-cio
http://leadingcompany. smartcompany.com.au/chief-information-officer/linfoxs-john-ansley-a-thoroughly-modern-cio
http://www.afr.com/p/australia2-0/cleaner_air_healthier_ truckers_top_RnFaIifTZ9RvXI6Y9sVygJ
http://www.afr.com/p/australia2-0/cleaner_air_healthier_ truckers_top_RnFaIifTZ9RvXI6Y9sVygJ
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